As chief economist for the Paris-based International Energy Agency, Fatih Birol helps shape energy policies worldwide. He recently guided the publication of the agency’s World Energy Outlook, which predicts the United States will soon become the world’s largest oil producer. While in Cambridge recently to speak at MIT, he sat down with Globe reporter Erin Ailworth.
Why do you believe the US will soon overtake Saudi Arabia as the largest oil producer?
The fundamentals of our global energy system are shifting. In the United States, oil production, which was declining for years and years, is now increasing mainly as a result of shale oil [drilling]. We expect, therefore, around 2017, the US to be the largest oil producer of the world.
In that light, how important is it for the US to develop a national energy policy?
Very much so. The major move in the United States toward self-sufficiency mainly is the result of development of technology in the shale oil [sector] but also policy. The Obama administration has successfully introduced [vehicle] fuel efficiency standards.
The United States also has responsibilities in terms of climate change, and those would need a national energy strategy, a national energy policy. Energy efficiency should be one of the key pillars of this new energy policy.
If energy efficiency is so important, why haven’t we done more?
Energy-efficiency improvements require a concerted effort of many players in the market. You need energy ministries, transportation, finance, construction — lots of people have to play a role. However, there is a growing momentum worldwide. At least four major economies in the world within the last nine months have pushed the button of energy efficiency: the US, China, Europe, and Japan.
What role do you see fossil fuels and renewables playing in the future energy landscape?
Fossil fuels will continue to dominate the energy mix, with the consequences mainly on the climate change front. We see that the share of coal [will continue] to decline whereas the share of natural gas [will continue] to increase. We expect that nuclear energy will grow, but much less than what we expected before Fukushima [the site of the nuclear disaster in Japan last year].
Renewable energies are just going through very difficult times. Ten years in a row, global renewable energy investments were increasing and this year, for the first time, we expect a decline. In many countries, renewable subsidies are being reduced, which is not good news.
Yet the agency’s forecast says renewables have the potential to become the second largest source of electricity?
This is definitely true, provided governments continue [their] support. For example, the United States. At the end of this year, there is an important decision to be made whether or not renewable support policies will continue.
The renewable industry is different than the fossil fuel industry. If they [take] a strong hit as a result of a lack of government support, it will be very difficult for them to come back because they’re a very new industry, unlike the oil or gas or coal or nuclear industry.
What role do you see fossil fuel subsidies playing in the energy future?
Fossil fuel subsidies [globally] are over half a trillion dollars — $523 billion exactly. For me, fossil fuel subsidies are the number one enemy of fighting climate change. You are putting out an award to pollute the world.
How do you change that?
What we have to do is make the governments understand that this may be good in the short term for the popularity of the government, however, it has major negative effects for the economy, efficiency, and environment of those countries.
Why has the agency highlighted water as one of the biggest challenges going forward?
Today, the energy sector uses about 15 percent of global water for electricity generation, biofuels, shale gas, and other applications. We see that this need will increase substantially in the future. The availability of water for energy will be a critical factor in assessing the economic and technical viability of any energy project.
Energy and water scarcity will go hand in hand. In the absence of water, we will have difficulties to produce energy.